India’s SENSEX breaks records
August 9, 2018, 10:32 am

The Prime Minister Narendra Modi delivering his keynote speech, at the plenary session of the World Economic Forum, in Davos on January 23, 2018 [PMO, India]

India’s benchmark Bombay Stock Exchange SENSEX has continued to break records this week.

On Wednesday the 30-share exchange broke its record to reach 38,061 before settling just below the 38,000 mark. At press time Thursday it is at 38,012, marking the first time ever it has reached this level.

Stocks, primarily in banking, IT, capital goods, and oil and gas were given a boost by the International Monetary Fund’s report earlier this week which said that India is continuing on its track to maintaining its position as one of the world’s fastest growing economies.

On August 7, the IMF said:

“India’s economy is picking up and growth prospects look bright—partly thanks to the implementation of recent policies, such as the nationwide goods and services tax. As one of the world’s fastest-growing economies—accounting for about 15 percent of global growth—India’s economy has helped to lift millions out of poverty.”

This is music to Prime Minister Narendra Modi’s ears as he has been pushing to open India to the world, boost foreign investment, ease the process of doing business in India, and marketing the Made in India brand.

However, the IMF urged the government to raise wages, which are among the lowest compared to its BRICS partners, and to push through vital labor market reforms.

Nevertheless, given the increased foreign investment environment the IMF forecasts that GDP growth will be 7.3 per cent for 2018/19 and 7.5 per cent for the following year.

In related news, Swedish furniture chain IKEA opened its first 400,000-square-foot store in Hyderabad, the capital of Telangana, on Thursday, after a five-year process to invest in the country

IKEA says it plans to open 25 other stores throughout the country over the next seven years.

57 founding members, many of them prominent US allies, will sign into creation the China-led Asian Infrastructure Investment Bank on Monday, the first major global financial instrument independent from the Bretton Woods system.

Representatives of the countries will meet in Beijing on Monday to sign an agreement of the bank, the Chinese Foreign Ministry said on Thursday. All the five BRICS countries are also joining the new infrastructure investment bank.

The agreement on the $100 billion AIIB will then have to be ratified by the parliaments of the founding members, Chinese Foreign Ministry spokesman Lu Kang said at a daily press briefing in Beijing.

The AIIB is also the first major multilateral development bank in a generation that provides an avenue for China to strengthen its presence in the world’s fastest-growing region.